FAO warns Hormuz could spike food prices

The U.N. Food and Agriculture Organization warned on May 21 that a serious disruption in the Strait of Hormuz could feed through into a global food-price shock within six to 12 months. The agency said the risk runs through fertilizer, fuel and shipping costs rather than through supermarket shelves immediately. FAO officials have said delays in fertilizer deliveries during planting windows can reduce yields even if trade flows recover later. Shipping companies and trade analysts say the cost pressure is already visible in rerouted voyages, higher insurance bills and more volatile fuel expenses. ### Why is a maritime chokepoint showing up in food markets? Máximo Torero, FAO’s chief economist, said on March 26 that disruption in Hormuz was “not only an energy shock” but a broader shock to agrifood systems. FAO said the strait normally carries about 20 million barrels of oil a day, around one-fifth of global liquefied natural gas and up to 30% of internationally traded fertilizers. (politico.eu) FAO said higher energy prices raise farm costs directly through fuel and indirectly through fertilizer production, especially for nitrogen products that depend on natural gas. The agency said Middle East granular urea prices rose 19% in the first week of March and Egyptian urea prices rose 28%, while its projections showed global fertilizer prices could average 15% to 20% higher in the first half of 2026 if the crisis persisted. (fao.org) ### Why does the warning focus on six to 12 months, not this week? QU Dongyu, FAO’s director-general, said on May 7 that fertilizer scarcity caused by Hormuz disruption would affect “the latter half of 2026 and into 2027.” He said agriculture works on a crop calendar and that fertilizers must arrive at specific moments in the cycle. “If they do not arrive on time, yields are reduced, regardless of what happens later,” he said. (fao.org) FAO said the countries most exposed include import-dependent economies in Africa, Asia and parts of the Middle East. UNCTAD said on April 28 that the shock had already moved “from gas to grain,” with higher energy and fertilizer costs increasing risks to food production, supply and prices, especially in economies with high import bills and limited fiscal space. (fao.org) ### What are shipping companies doing now? Maersk, MSC, Hapag-Lloyd and CMA CGM suspended or adjusted operations through Hormuz and rerouted vessels around the southern tip of Africa after the conflict escalated in early March, CNBC reported. Maersk said services calling Persian Gulf ports could face delays, and some sailings were redirected around the Cape of Good Hope instead of using Suez and the Bab el-Mandeb route. (fao.org) UNCTAD said ship transits through Hormuz fell about 95% after the disruption deepened. It also said tanker freight rates, marine fuel costs and war-risk insurance premiums rose sharply, adding to import bills and trade costs beyond the energy sector. ### Where does ZIM fit into the picture? ZIM said on May 20 that the conflict in the Persian Gulf had caused “a sharp increase and significant volatility in bunkering costs.” Chief Executive Eli Glickman said the effect on first-quarter results was minimal but would be more meaningful in the second quarter before freight-rate increases and bunker surcharges began to offset it. (cnbc.com) (unctad.org) ZIM reported first-quarter revenue of $1.40 billion, down 30% from a year earlier, and an operating loss of $18 million. The company said service reliability remained a priority as it dealt with hostilities affecting Israel and the Middle East. ### Why are companies treating this as a lasting cost? The National reported on May 21 that firms are increasingly choosing reliability and security over the cheapest route as Red Sea and Hormuz disruptions recur. (prnewswire.com) UNCTAD said the broader effect was higher trade costs and greater fragility for developing economies, while FAO said even a short fertilizer delay can carry into later harvests. Together, those warnings describe a supply chain that is absorbing higher transport and input costs before consumers see the full effect. May 20 and May 21 disclosures from ZIM and FAO provide the next checkpoints for the story: second-quarter carrier results for evidence of higher bunkering costs, and FAO updates on fertilizer availability ahead of planting and harvest cycles in late 2026. (prnewswire.com) (unctad.org)